Tesla Snatches Up SolarCity to Power Your Home and Car

By combining forces with SolarCity, Tesla wants you to be able to buy solar panels, storage batteries and an electric car from the same company.

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The Master Plan is coming together. Tesla has announced that it is acquiring SolarCity in a $2.6 billion deal, which will enable consumers to buy solar panels for their homes, storage batteries for the energy and electric cars from a single company.

According to a company blog post, Tesla's aim is to forge the world's "only vertically integrated sustainable energy company," as well as to "create fully integrated residential, commercial and grid-scale products that improve the way energy is generated, stored and consumed."

Tesla notes that the companies will realize $150 million in cost synergies the first year after closing the deal, but the real impact will be felt by everyday consumers.

Some day soon you'll likely be able to walk into any one of Tesla's 190 retail stores or go online and have a one-stop shop of solar energy and storage, not to mention a shiny new vehicle to take advantage of all of that energy.

Tesla says that customers will enjoy a streamlined experience because they'll have to deal with just one installation and one service contract, and that they'll be able to manage everything via a single app.

Ultimately, this about Tesla building out an ecosystem. It won't just be an electric car company but a clean energy company. The Tesla-SolarCity connection reminds me of Apple expanding beyond devices into services like iTunes and the App Store. It's vital to make Tesla more sticky as a brand.

This deal isn't necessarily a lock, as Tesla's independent shareholders still need to vote on it. (Elon Musk is actually on the board of Solar City, so he has recused himself from voting).

Tesla faces other challenges, too, including meeting demand for car orders. For instance, the company says that it hopes to ship upwards of 50,000 vehicles during the second half of 2016. And yet Tesla already has 400,000 pre-orders for the Model 3 alone.

That's where Tesla's Gigafactory in Nevada comes in, which promises to pump out as many 500,000 batteries for Model 3 cars per year by 2018.

Tesla also still has a PR problem on its hands with the driver who died while using the company's Auto Pilot feature. Despite this setback and the NHTSA investigation, the company is adamant that rolling out partially autonomous cars now makes us safer.

Now the company wants to power your home, too. The combination of solar and electric vehicles could be a very potent one for Tesla, but only if the marriage helps the company make electric vehicles more affordable and accessible.

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